Standard & Poor's last night said it may upgrade Huntsman after the US chemicals company ended discussions over a sale which would have added to its $4.5bn (â¬3.8bn) of debt.

Huntsman confirmed late last year that it had received interest regarding an acquisition, and hired Merrill Lynch and SG Cowen as financial advisers and Vinson & Elkins and Weil, Gotshal & Manges as legal advisers.

The chemicals company did not identify the parties in the sales discussion, but The Wall Street Journal reported that it was talking to private equity firms and other industry companies to be sold for more than $4.3bn. Buy-out firm Apollo Management, which owns other chemical companies, was considered a leading candidate, the newspaper reported.

Standard & Poor's then placed Huntsman on CreditWatch with negative implications, indicating that a downgrade was likely. At the end of September 2005, Huntsman had approximately $4.5bn of debt.

Kyle Loughlin, credit analyst at S&P said: "The CreditWatch listing indicates that the ratings would likely be lowered if such a transaction were to proceed, given the strong expectation that Apollo or other potential financial buyers would use a significant amount of debt in any financing plans."

On February 5 Huntsman said that it had terminated sale discussions. Jon Huntsman, founder and chairman of the company, said: "While the last proposals were above the price of our flotation last year I believe they were not adequate, particularly in light of the risks, uncertainties and extended timing of the proposed transactions."

Huntsman shares were issued at $23 in the flotation and closed at $20.41 yesterday, valuing the company at $4.5bn.

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Yesterday S&P removed Huntsman from CreditWatch and said the company has a positive outlook. Loughlin said: "The affirmation indicates that an ownership change is now less likely to impact credit quality for the foreseeable future, while Huntsman's continued emphasis on debt reduction and moderate growth within differentiated product categories supports credit quality."